| Islamic Investment Bank Limited |
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| Annual
Report 1999 |
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| CONTENTS |
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| Corporate
Information |
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| Notice
of Meeting |
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| Directors'
Report and Chief Executive's Review |
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| Auditors'
Report |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Statement
of Changes in Financial Position |
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| Notes
to the Accounts |
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| Pattern
of Share Holding |
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| Annual
Accounts of |
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| First
Islamic Modaraba |
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| Switch
Securities (Pvt.) Limited |
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| Switch
Currencies (Pvt.) Limited |
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| Consolidated
Accounts |
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| CORPORATE
INFORMATION |
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| BOARD
OF DIRECTORS |
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| Chairman |
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Bashir Ahmad |
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| Vice Chairman |
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Giulio Franzinetti |
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| President
& Chief Executive |
M. Nadeem Anwar |
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| Directors |
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Andrew Geoffrey Yates |
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| (In
Alphabetical order) |
Abdul Wadud Khan |
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Abdul Haleem Piracha |
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Arshad Wadud Khan |
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Behram Hasan |
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Shahid Hafiz Kardar |
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Zafar Iqbal Qureshi |
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| Secretary |
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M.H.M. Burney |
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| Auditors |
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M. Yousuf Adil Saleem
& Co. |
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Chartered Accountants |
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| Legal Retainers |
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M/s. Habib-ur-Rehman
& Co. |
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Barristers &
Advocates, Karachi. |
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Mr. Nisar Ahmad Khan,
Advocate, |
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Peshawar |
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M/s. Walker Martineau
Saleem, |
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Barristers &
Advocates, Lahore. |
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| Main Bankers |
|
Allied Bank of Pakistan |
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American Express Bank |
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Askari Commercial Bank
Limited |
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Bank of Khyber |
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Bolan Bank Limited |
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Gulf Commercial Bank
Limited |
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Muslim Commercial Bank
Limited |
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National Bank of Pakistan |
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Prime Commercial Bank
Limited |
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Union Bank Limited |
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| Registered/ |
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1st Floor, State Life
Building, |
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| Head Office |
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The Mall, Peshawar |
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| Corporate
& Treasury |
Finance & Trade
Centre, Tower B, 2nd Floor, |
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| Operations |
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Sharea Faisal, Karachi |
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| BRANCHES |
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Karachi |
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Mingora (Swat) |
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Lahore |
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Hangu (Distt: Kohat) |
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Main Branch, Peshawar |
Islamabad. |
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Mardan |
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| NOTICE
OF NINTH ANNUAL GENERAL MEETING |
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| It
is hereby notified that Ninth Annual General Meeting of Islamic Investment
Bank Limited will be held on Tuesday, |
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| February
29, 2000 at 11:00 a.m. at its Registered Office, State Life Building, The
Mall, Peshawar to transact the |
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| following
business: |
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| 1.
To confirm the Minutes of the 8th Annual General meeting held on February 27,
1999. |
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| 2.
To receive, consider and adopt the audited accounts together with the
Directors and Auditors' Reports |
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| thereon
for the year ended June 30, 1999. |
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| 3.
To appoint Auditors and fix their remuneration. |
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| 4.
To consider any other matter with the permission of the Chair. |
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| Special
Business |
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| 5.
Transfer of Seat of Islamabad Stock Exchange |
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| To
enable Switch Securities (Pvt) Limited, a wholly-owned subsidiary of Islamic
Investment Bank Limited, to |
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| enhance
its area of operation and get recognition in two out of the three Stock
Exchanges of the country, |
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| namely,
Lahore Stock Exchange and Islamabad Stock Exchange, the directors have
recommended to |
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| transfer
the Bank's seat of Islamabad Stock Exchange to Switch Securities (Put)
Limited at cost. Following |
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| Special
Resolution is accordingly proposed to be moved and adopted to transfer the
seat of Islamabad Stock |
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| Exchange
to Switch Securities (Pvt) Limited. |
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| "Resolved
That the existing seat of Islamic Investment Bank Limited on Islamabad Stock
exchange be and |
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| is
hereby transferred to Switch Securities (pvt) Limited at cost." |
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By Order of the Board |
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|
M.H.M. Burney |
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| Peshawar:
February 8, 2000 |
|
Secretary |
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| NOTES: |
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| 1.
The Share Transfer Books for voting rights will remain closed from February
29, 2000 to March 8, 2000 |
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| both
days inclusive. |
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| 2.
A member entitled to attend and vote at this meeting may appoint another (one
only) member as his/her |
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| proxy
to attend and vote instead. Proxies, in order to be effective, must be
received at the Registered Office |
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| of
the Company not later than 48 hours before the time fixed for the meeting. |
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| Statement
under Section 160 of the Companies Ordinance 1984 |
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| 1.
The seat of Islamic Investment Bank Limited on Islamabad Stock Exchange is
proposed to be transferred to |
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| Switch
Securities (Put) Limited to enable Switch Securities (Put) Limited to enhance
its area of operation and |
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| get
recognition in Islamabad Stock Exchange in addition to Lahore Stock Exchange. |
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| 2.
The Directors have no vested interest in the proposed transfer of seat. |
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| DIRECTORS'
REPORT AND CHIEF EXECUTIVE'S REVIEW |
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| We
take pleasure in presenting to you the 9th Annual Report of Islamic
Investment Bank Limited together with the |
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| audited
accounts and the Auditors' Report thereon for the year ended June 30, 1999. |
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| The Economy |
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| During
the earlier part of 1998-99 the national economy remained under severe
pressures largely stemming from |
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| the
unprecedented developments and disruptions that took place in the concluding
months of 1997-98. Later, an |
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| understanding
was reached with IMF for the resumption of suspended ESAF/EFF programme. This
was followed |
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| by
an agreement with Paris Club and London Club providing for rescheduling of
Pakistan's external debt by other |
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| lenders.
These arrangements provided the country a breathing space to redefine its
policies with a view to building |
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| a
sustainable base for economic growth and enhancement in its ability to meet
its external obligations. All in all, |
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| the
country continued to face very difficult economic challenges throughout the
year. |
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| The
military takeover of the government, in mid-October, 1999, came as a
watershed which ushered in an era of |
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| total
reappraisal of the existing economic scene by a team of new economic
managers. Arising out of this review |
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| and
reappraisal, a comprehensive package was announced on December 15, 1999
envisaging wide-ranging |
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| reforms
in critical areas of the national economy aimed at economic revival and
revitalization. |
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| Commenting
on medium-term prospects, the State Bank of Pakistan has observed that
"the performance of the |
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| Pakistan
economy during 1998-99 apart, there are a number of problems characterizing
the economy which can |
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| effectively
be addressed only over a medium-term period." Amongst others, "the
unsustainably large fiscal deficit |
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| with
its implications for the size of national debt and consequently the burden of
debt servicing continues to be the |
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| most
challenging problem for Pakistan. The rescheduling of debt under the aegis of
Paris Club and London Club |
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| as
a follow up of reactivation of programme with the IMF has provided a limited
time span to put in place and |
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| strengthen
various policies to consolidate the position for an improvement in the
macroeconomic fundamentals." |
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| Injection
of Capital |
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| As
far back as December 1997, the directors had taken the initiative of going in
for a 100% Right Issue, which was |
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| fully
underwritten by overseas investors. However, following the events of May
1998, the underwriters were unable |
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| to
fulfill their obligations under force majeure and the directors' plans to
beef up the capital were thus aborted. Despite |
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| this
unforeseen setback, the directors continued their efforts to augment the
Bank's capital and, with the help of their |
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| friends
and associates, they were able to mobilise an amount of Rs. 50 million
towards subscription of the Right Issue. |
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| Under
the present difficult investment climate, this was not a mean achievement. |
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| Resource
Mobilization |
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| The
funds generated through the deposit campaign launched in September 1998 under
the name and style of Islamic |
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| Munafa
helped us reduce of our cost of funds. Our treasury operations also expanded
significantly and we were |
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| net
lenders in the market for a greater part of the year. |
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| Investments |
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| The
diminution in the value of the Bank's investments as per accounts is Rs. 115
million. Of this, Rs. 55 million pertains |
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| to
the Bank's strategic holding of First Islamic Modaraba, which is managed by
the Bank. As a result of improvement |
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| in
the value of shares of the Modaraba at the close of the Bank's financial year
and beyond, it has been amply |
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| demonstrated
that the diminution in the value of Modaraba's shares was not permanent. In
the changed scenario, |
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| therefore,
the Board was of the view that it should not longer be necessary to provide
for any diminution in the value |
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| of
shares of the Modaraba. |
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| With
regard to the qualification relating to the diminution in long term
investments, in terms of the Bank's Accounting |
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| Policy,
long term investments were stated at cost. However, cost was reduced to
recognize any decline thereof, other |
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| than
temporary. The Bank had been consistent in its adherence to this policy over
the years. |
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| The
Bank held these investments as its long term investments and hence had
scrupulously avoided any trading in |
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| these
investments. |
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| The
Board was, therefore, of the view that provision for diminution in the value
of long term investments might not |
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| be
made this year. There has been considerable improvement in the value of some
of these shares already. |
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| The
Board noted that mark-up of Rs. 72,091 million and guarantee commission of
Rs. 15.867 million on account |
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| of
Sunrise Textiles Limited has been written back only after the Lahore High
Court in its order dated December 9, |
|
| 1999
finally accepted the Bank's plea to allow it to purchase the property in full
and final settlement of the decretal |
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| amount
of Rs. 317,133 million. The value of the properly has been determined by
independent valuers at |
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| Rs.
360.382 million. |
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| Credit
Operations |
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| The
Bank's lending operations have continued to be guided by caution and
prudence. Fresh lending has been made |
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| on
fully secured basis, a significant portion of such lending being against the
Bank's own deposits. |
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| A
welcome change has been visible recently in the textiles sector which after a
trough of almost five or six years, |
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| is
now showing signs of recovery. The Bank's exposure to this sector would
hopefully exhibit greater vibrancy now |
|
| than
in previous years. |
|
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| Recovery
Efforts |
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| Vigorous
follow up for recovery of our outstanding overdue credits has been the
central plank of our credit policy. |
|
| Admittedly,
the recovery drive recently launched by the present Government provided
greatly added fillip to our |
|
| recovery
effort. Some of our most recalcitrant borrowers came up to us with cash and
feasible repayment |
|
| programmes.
We have thus been able to make significant cash recoveries in some of our
overdue accounts in |
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| addition
to restructuring and rescheduling quite a few ether loans. |
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|
| Operating
Expenses |
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| Collectively,
the overheads and operating expenses of the Bank have declined. Pursuant to
our policy of rationalizing |
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| and
cutting costs, with focus on administrative costs, this is a positive
development. Amongst other measures, this |
|
| has
been possible by consolidating our operations at Karachi and re-locating some
of our offices at Peshawar and |
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| Islamabad.
Relocations have also given us considerably improved visibility. |
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|
| Capital
market Operations |
|
| The
resilience and buoyancy displayed lately by the capital markets of the
country have motivated us to significantly |
|
| step
up our capital market operations. Switch Securities (Pvt) Limited, which is a
wholly owned subsidiary of the Bank, |
|
| is
increasingly becoming the preferred brokerage house for institutional
investors for Lahore Stock Exchange |
|
| operations. |
|
|
| Merchant
Banking Group |
|
| During
the year, the Bank's management concentrated in further specializing and
refining its advisory services to |
|
| clients.
This was also a step in the field of pure investment banking, as the Bank
would deploy its human and not |
|
| the
financial resources to arrange and provide finance and services to its
clients. As the year witnessed a slow down |
|
| in
the country's economy, major effort was made in developing international
transactions. |
|
|
| In
the domestic sector, the Bank was mandated by Army Welfare Trust to undertake
a debt and equity syndication |
|
| of
Pak. Rs. 2 billion for Askari Power. This unit would supply power to the
cement units set up and acquired by AWT |
|
| and
will result in substantial savings to the group in terms of power costs. A
world class project evaluation was |
|
| undertaken
by the Bank and syndication both for a suppliers' credit guarantee and local
financing was arranged. |
|
| Subsequently,
the project has been put on hold because of economic conditions. |
|
|
| During
the year, a lot of effort and time was spent on the development of
international transactions and structuring |
|
| of
the Bank's human resources to perform such a role. In this regard, the Bank
was mandated by the Basheroinvest |
|
| Joint
Stock Company of the Republic of Bashkortostan (part of the Russian
Federation) to provide advisory services |
|
| for
the international airport project at Oufa, the capital city. This project is
a milestone as it would create a new air |
|
| route
for planes going from Western Europe to Far East as both the travel time and
fuel costs would be cut down |
|
| due
to the strategic location of Oufa. The Republic is one of the highest oil
producing ones in the Russian Federation. |
|
| The
exercise was quite complex as full securitization of the guarantees issued by
the Republic needed to be done |
|
| with
the oil assets. The Bank arranged the structure for the funding and the
project is now moving ahead. |
|
|
| Diversification
of Business |
|
| We
have continued our endeavour over the years to diversify our business anti
open up new income streams to give |
|
| depth
to out operations. We have been engaged in packaging investment proposals for
potential investors to take |
|
| advantage
of emerging investment opportunities especially in energy and
telecommunications sectors. A major |
|
| development
in this area this year has been the launching of Gas Power (Pvt) Limited. |
|
|
| Gas
Power (Pvt) Ltd. has been established under Companies Ordinance, 1984 as a
private limited company. The |
|
| sponsors
and promoter of the Company is Islamic Investment Bank Limited. Gas Power has
been set up to provide |
|
| support
role for the benefit of Government of Pakistan and general public in line
with the Government's energy |
|
| conservation
and environmental policies. It will facilitate establishment of CNG stations
through out the country |
|
| through
one-window operation. It is the first company in Pakistan to offer CNG
business on corporate level and has |
|
| plans
to build a nation-wide network of CNG filling stations on franchising
concept. |
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|
| Y2K
Compliance |
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| Timely
measures were taken by us to ensure that the Bank is fully Y2K compliant. As
a result, the level of our |
|
| preparedness
fully secured all our core operational activities. |
|
|
| The
directors with to place on record their gratitude for the continued help and
guidance received from the State |
|
| Bank
of Pakistan. The Directors also appreciate the commitment of all members of
staff in carrying out their |
|
| responsibilities
in the Bank. |
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|
|
|
For and on behalf of the Board of Directors |
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|
|
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|
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|
M. Nadeem Anwar |
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| Date:
February 8, 2000 |
|
President & Chief Executive |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of ISLAMIC
INVESTMENT BANK LIMITED as at June |
|
| 30,
1999 and the related profit and loss account and the statement of changes in
financial position, (cash |
|
| flow
statement) together with the notes forming part thereof, for the year ended
on that date and we state |
|
| that
we have obtained all the information and explanations which to the best of
our knowledge and belief |
|
| were
necessary for the purposes of our audit and, after due verification thereof,
we report that: |
|
|
| 1.
Provision amounting to Rs. 115,158,470/- including provision of Rs.
55,424,000/- which pertains |
|
| to
First Islamic Modaraba managed by the Company as referred to in note 14.2,
for diminution in |
|
| the
value of long term investments determined as per Technical Release 23 issued
by the Institute of |
|
| Chartered
Accountants of Pakistan has not been made in the financial statements. This
would result |
|
| in
the increase in the loss by the above amount. |
|
|
| (a)
In our opinion, proper books of account have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| (b)
In our opinion: |
|
|
| (i)
the balance sheet and profit and loss account together with the notes forming
part thereof have |
|
| been
drawn up in conformity with the Companies Ordinance, 1984, and are in
agreement with |
|
| the
books of account and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
| (ii)
the expenditure incurred during the year was for the purpose of the Company's
business; and |
|
|
| (iii)
the business conducted, investments made and the expenditure incurred during
the year were |
|
| in
accordance with the objects of the Company; |
|
|
| (c)
In our opinion and to the best of our information and according to the
explanations given to us, |
|
| except
for the effect on the financial statements of the matters referred to in
paragraph 1 above, |
|
| the
balance sheet, profit and loss account and the statement of changes in
financial position (cash |
|
| flow
statement), together with the notes thereon, give the information required by
the Companies |
|
| Ordinance,
1984, in the manner so required and-respectively give a true and fair view of
the state |
|
| of
the Company's affairs as at June 30, 1999 and of the loss and the changes in
financial position |
|
| for
the year then ended; and |
|
|
| (d)
In our opinion, Zakat deductible at source, under the Zakat and Ushr
Ordinance, 1980 was |
|
| deducted
by the Company and deposited in the Central Zakat Fund established under
Section 7 |
|
| of
that Ordinance. |
|
|
| Without
further qualifying our opinion, we draw attention of the members towards the
following matters:- |
|
|
| I.
Income of Rs. 87.958 million in respect of markup and commission (Refer Note
No. 21.2.1 and |
|
| 21.3.1)
has been accrued against a non performing advance on the basis of Court
decree and |
|
| for
the reasons explained in Note No. 17.1a. |
|
|
| II.
There is a deficit of Rs. 176.309 million in Cash Management Accounts
including Rs. 17.477 |
|
| million
in respect of management fee charged to this account (Refer Note No. 29). |
|
|
| Place: Karachi |
|
|
M. YOUSUF ADIL SALEEM & CO. |
|
| Date:
February 08, 2000 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
| SHARE
CAPITAL AND RESERVES |
|
|
|
|
|
| Share capital |
|
|
|
3 |
197,683,250 |
147,646,590 |
|
|
| Capital reserves |
|
|
|
4 |
13,600,000 |
13,600,000 |
|
|
| Revenue
reserves |
|
|
5 |
-- |
23,500,000 |
|
|
| Accumulated
losses |
|
|
(163,084,626) |
(105,040,668) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
48,198,624 |
79,705,922 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
6 |
24,697,134 |
-- |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
|
| TO
FINANCE LEASE |
|
7 |
616,185 |
-- |
|
| LONG
TERM DEPOSITS |
|
8 |
709,707,220 |
32,966,620 |
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
| Short
term deposits |
|
8 |
148,435,827 |
1,024,368,349 |
|
| Borrowings |
|
9 |
175,000,000 |
203,054,645 |
|
| Accrued
and other liabilities |
|
10 |
40,289,727 |
67,429,290 |
|
| Provision
for taxation |
|
|
9,800,000 |
6,030,803 |
|
|
|
|
------------------ |
------------------ |
|
|
373,525,554 |
1,300,883,087 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
11 |
|
|
|
|
------------------ |
------------------ |
|
|
|
1,156,744,717 |
1,413,555,629 |
|
|
|
|
|
========== |
========== |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
12 |
56,935,086 |
38,509,197 |
|
| INTANGIBLE
ASSETS |
|
13 |
4,500,000 |
4,500,000 |
|
| LONG
TERM INVESTMENTS |
|
14 |
227,817,944 |
205,889,118 |
|
| LONG
TERM FINANCING |
|
17 |
37,242,000 |
80,259,679 |
|
| LONG
TERM LOANS |
|
15 |
5,402,892 |
6,020,074 |
|
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
| Cash
and bank balances |
|
16 |
590,094.24 |
51,306,859 |
|
| Short
term financing |
|
17 |
452,009,202 |
615,080,198 |
|
| Short term loans |
|
18 |
|
|
| Short
term investments |
|
19 |
47,793,702 |
123,291,562 |
|
| Short
term placements |
|
20 |
-- |
20,000,000 |
|
| Advances,
deposits, prepayments |
|
|
|
|
| and
other receivables |
|
21 |
264,378,638 |
266,878,184 |
|
|
|
|
------------------ |
------------------ |
|
|
|
824,846,795 |
1,078,377,561 |
|
|
|
------------------ |
------------------ |
|
|
|
1,156,744,717 |
1,413,555,629 |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 33 form an integral part of these accounts. |
|
|
|
M. Nadeem Anwar |
|
|
|
President & Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| INCOME |
|
|
|
| Return
on financing and placements |
|
22 |
176,413,089 |
139,191,472 |
|
| Dividend |
|
|
1,143,474 |
3,005,276 |
|
| Commission
and fees |
|
|
59,579,703 |
34,625,651 |
|
| Income
from investments |
|
23 |
21,268,926 |
64,929,582 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
258,405,192 |
241,751,981 |
|
|
|
|
| EXPENDITURE |
|
|
|
| Return
and brokerage on deposits |
|
|
121,768,566 |
152,275,542 |
|
| Forward
cover charges |
|
|
23,773,623 |
31,752,074 |
|
| Financial
charges |
|
24 |
76,139,770 |
72,854,890 |
|
| Salaries,
allowances and benefits |
|
25 |
22,378,299 |
24,429,841 |
|
| Operating
expenses |
|
26 |
32,163,549 |
31,798,541 |
|
| Depreciation |
|
|
7,532,248 |
7,619,524 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(283,756,055) |
(320,730,412) |
|
|
|
|
------------------ |
------------------ |
|
| Loss
before provisions and taxation |
|
|
(25,350,863) |
(78,978,431) |
|
| Provision
for contingencies |
|
27 |
(70,901,609) |
(16,677,481) |
|
|
|
|
------------------ |
------------------ |
|
| OPERATING
LOSS |
|
|
(96,252,472) |
(95,655,912) |
|
| Other income |
|
28 |
18,477,711 |
12,271,627 |
|
|
|
|
------------------ |
------------------ |
|
| Loss
before taxation |
|
|
(77,774,761) |
(83,384,285) |
|
| TAXATION |
|
|
| Current-minimum
tax based on turnover |
|
1,500,000 |
1,270,118 |
|
| Prior year's |
|
2,269,197 |
1,260,685 |
|
|
|
|
------------------ |
------------------ |
|
|
|
(3,769,197) |
(2,530,803) |
|
|
|
------------------ |
------------------ |
|
| LOSS
AFTER TAXATION |
|
(81,543,958) |
(85,915,088) |
|
| ACCUMULATED
LOSS BROUGHT FORWARD |
|
(105,040,668) |
(19,125,580) |
|
|
|
------------------ |
------------------ |
|
|
|
(186,584,626) |
(105,040,668) |
|
|
|
|
|
|
| APPROPRIATIONS |
|
|
|
| Transferred
from revenue reserves |
|
|
| Reserve
for contigencies |
|
10,000,000 |
-- |
|
| General reserve |
|
13,500,000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
23,500,000 |
-- |
|
|
|
|
|
------------------ |
------------------ |
|
| ACCUMULATED
LOSS CARRIED FORWARD |
|
|
(163,084,626) |
(105,040,668) |
|
|
|
|
========== |
========== |
|
|
| The
annexed notes from 1 to 33 form an integral part of these accounts |
|
|
|
M. Nadeem Anwar |
|
|
|
President & Chief Executive |
|
Director |
|
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| A.
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
| Return,
commission and other receipts |
|
275,769,779 |
214,268,272 |
|
| Return,
forward cover and mark-up payments |
|
(221,681,959) |
(256,882,506) |
|
| Payments
of salaries and operating expenses |
|
(54,541,848) |
(56,228,382) |
|
|
|
|
------------------ |
------------------ |
|
|
|
(454,028) |
(98,842,616) |
|
| (Increase)/decrease
in assets |
|
|
|
| Advances,
deposits and prepayments |
|
(13,675,496) |
(58,767,605) |
|
| Financing
to customers |
|
|
183,561,676 |
14,769,231 |
|
| Loans to staff |
|
|
782,111 |
(1,373,754) |
|
| Increase/(decrease)
in liabilities |
|
|
|
|
| Accrued
and other liabilities |
|
|
(27,038,455) |
19,365,164 |
|
| Deposits
from customers |
|
|
(199,191,922) |
13,942,403 |
|
|
|
------------------ |
------------------ |
|
|
|
(56,016,114) |
(110,907,177) |
|
| Income tax paid |
|
|
(8,347,693) |
(16,212,471) |
|
|
|
------------------ |
------------------ |
|
| Net
cash used in operating activities |
|
(64,363,807) |
(127,119,648) |
|
|
|
|
========== |
========== |
|
|
|
|
| CASH
FROM INVESTING ACTIVITIES |
|
|
| Dividend
received |
|
1,143,474 |
3,005,276 |
|
| Proceeds
from sale of fixed assets |
|
2,029,737 |
1,369,874 |
|
| Proceeds
from sale of room and membership card |
|
-- |
15,000,000 |
|
| Purchase
of fixed assets |
|
(2,880,544) |
(12,203,516) |
|
| Purchase/sale
of investments |
|
49,276,614 |
(12,203,516) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from investing activities |
|
49,569,281 |
29,781,934 |
|
|
|
|
========== |
========== |
|
|
|
|
| CASH
FROM FINANCING ACTIVITIES |
|
|
| Increase
in paid up capital |
|
50,036,660 |
-- |
|
| Borrowings |
|
(28,054,645) |
92,960,326 |
|
| Repayments
of obligation under finance lease |
|
515,076 |
(3,292,410) |
|
|
|
------------------ |
------------------ |
|
| Net
cash from financing Activities |
|
22,497,091 |
89,667,916 |
|
|
|
========== |
========== |
|
|
|
|
|
| Net
increase/(decrease) in cash and cash equivalents A+B+C |
|
7,702,565 |
(7,669,798) |
|
| Cash
and cash equivalent at beginning of the year |
|
51,306,859 |
58,976,657 |
|
|
|
------------------ |
------------------ |
|
| Cash
and cash equivalent at end of the year |
|
59,009,424 |
51,306,859 |
|
|
|
|
========== |
========== |
|
|
|
|
M. Nadeem Anwar |
|
|
|
President & Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED JUNE 30, 1999 |
|
|
| 1.
LEGAL STATUS AND NATURE OF BUSINESS |
|
| Islamic
Investment Bank Limited (the company) was incorporated in Pakistan on June
14, 1990 as a public |
|
| limited
company and is listed on the Karachi and Lahore Stock Exchanges. The company
is principally |
|
| engaged
in the business of investment banking under the provisions of SRO 585(I)/87
dated July 13, 1987 |
|
| issued
by the Ministry of Finance, Government of Pakistan. The company also manages
First Islamic |
|
| Modaraba. |
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
|
|
| 2.1
Accounting convention |
|
| These
accounts have been prepared under the 'historical cost convention'. |
|
|
|
| 2.2
Staff retirement benefits |
|
| The
company operates a contributory provident fund for all its permanent
employees and contributions |
|
| to
the fund are made by the company and the employees in accordance with the
fund rules. |
|
|
| 2.3
Provision for contingencies |
|
|
|
| Provision
for contingencies against loans, advances and investments, if any, are made
annually after |
|
| review
of portfolio existing at the year end. |
|
|
|
|
|
|
| 2.4 Taxation |
|
|
|
| Provision
for current taxation is based on taxable income at the current rate of
taxation after |
|
| considering
all applicable tax credits, rebates and exemptions. The company accounts for
deferred |
|
| tax
using the liability method on all major timing differences. |
|
|
|
| 2.5 Investments |
|
|
|
| Short
term investments are stated at the lower of cost and market value determined
on aggregate |
|
| portfolio basis. |
|
|
|
|
|
|
| Long
term investments are stated at cost. However, cost is reduced to recognize
any decline thereof, |
|
| other
than temporary. Investments made under purchase and resale arrangements are
stated at |
|
| purchase price. |
|
|
|
|
|
|
| Gains
and losses on sale of investments during the year are included in income
currently. The income |
|
| from
investments under Repo arrangements is recognised on time basis taking into
account the |
|
| difference
between purchase price and resale price agreed with the investees. |
|
|
|
|
| 2.6
Tangible fixed assets and depreciation |
|
|
|
| Tangible
fixed assets are stated at cost less accumulated depreciation except for land
which is stated |
|
| at
cost, Depreciation on all operating fixed assets is charged to income on
straight line method at the |
|
| rates
given in Note No. 12. |
|
|
|
|
|
|
| Full
year's depreciation is provided in the year of purchase while no depreciation
is charged on assets |
|
| deleted
during the year. |
|
|
|
|
| Maintenance
and normal repairs are charged to income as and when incurred, Major renewals
and |
|
| improvements
are capitalized and the assets so replaced, if any, are retired. Gains and
losses on |
|
| disposal
of assets, if any, are included in income currently. |
|
|
|
|
|
| 2.7
Assets subject to finance lease |
|
|
|
| Assets
subject to finance lease are stated at the lower of present value of minimum
lease payment |
|
| under
the lease agreements and fair value of the assets. The related obligations of
the lease are |
|
| accounted
for as liabilities. |
|
|
|
|
|
|
| Assets
acquired under a finance lease are amortized over their useful lives on
straight line method |
|
| at
the rates given in note 12. Amortization of the leased assets is charged to
income. |
|
|
| 2.8
Intangible assets |
|
| These
are stated at acquisition cost, Provisions are made for permanent diminution,
if any, in value |
|
| of these assets. |
|
|
|
|
| 2.9
Government securities repurchase/resale transactions |
|
| The
company enters into transactions of repurchase or resale in Government
securities at contracted |
|
| rates
for specified periods of time. |
|
|
| These
are recorded as follows: |
|
|
| (a)
in the case of sale under purchase obligations, the securities are deleted
from the books at cost |
|
| (whilst
the coupon income continues to be accrued) and the charges arising from the |
|
| differential
in sale and purchase values are accrued on pro-rata basis and recorded under |
|
| income
from Government securities. Upon repurchase the securities are reinstated at
their |
|
| respective
original cost. |
|
|
| (b)
in the case of purchase under resale obligations, the securities are booked
at the contracted |
|
| purchase
price and the differential of the contracted purchase and resale prices is
amortized |
|
| over
the period of the contract and recorded under income from Government
securities. |
|
|
| 2.10
Revenue recognition |
|
| Income
on financing and advances is generally recognised on time basis taking into
account |
|
| the
principal/net investments outstanding and applicable rates of profit/return
thereon. |
|
| Income
on discounted commercial papers is also recognised on time basis over the
life of the |
|
| instrument. |
|
|
| Dividend
on equity investment is recognised as income when right to receive dividend
is established. |
|
|
| Return
on Federal Investment Bonds is recognized and recorded on time proportion
basis. |
|
|
| Fee,
commission, liquidated damages etc. are recorded when these are earned and
right to receive |
|
| them
is also established. |
|
|
| 2.11
Foreign currency translation |
|
| Assets
and liabilities in foreign currencies are translated into rupees at the
exchange rates prevailing |
|
| on
the balance sheet date. However, liabilities representing deposits in foreign
currencies and return |
|
| on
them are converted at the rate prevailing on the date of deposits where the
option of exchange |
|
| risk
coverage has been exercised. |
|
|
| Transactions
in foreign currency are converted into rupees at the rates prevailing on the
date of |
|
| transaction,
except those covered under forward contracts which are translated at the
contractual rates. |
|
|
| Exchange
differences are included in income currently. |
|
|
| 2.12
Financial instruments |
|
| All
the financial assets and liabilities are recognized at the time when the
company becomes a party |
|
| to
the contractual provisions of the instrument. Any gain or loss on the
recognition and |
|
| derecognition
of the financial assets and liabilities is included in the net profit and
loss for the period |
|
| in
which it arises. |
|
|
| 2.13
Off setting of financial assets and liabilities |
|
| A
financial asset and liability is offset and the net amount is reported in the
balance sheet if the |
|
| company
has a legal enforceable right to setoff the recognized amounts and intends
either to settle |
|
| on
a net basis or to realize the asset and settle the liability simultaneously. |
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| 3.
SHARE CAPITAL |
|
|
|
| Authorised |
|
|
|
| 50,000,000
ordinary shares of Rs. 10/- each |
|
|
500,000,000 |
500,000,000 |
|
| Issued,
subscribed and paid up capital |
|
|
| 18,118,325
(1998 - 13,114,659) ordinary shares of |
|
|
| Rs.
10/- each fully paid in cash (3.1) |
|
|
181,183,250 |
131,146,590 |
|
| 150,000
ordinary shares of Rs. 10/- each |
|
|
| fully
paid for consideration other than cash |
|
|
1,500,000 |
1,500,000 |
|
| 1,500,000
ordinary shares of Rs. 10/- each issued |
|
|
| as
fully paid bonus shares |
|
|
15,000,000 |
15,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
197,683,250 |
147,646,590 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 3.1
Issued, subscribed and paid up capital |
|
|
| Opening
balance |
|
131,146,590 |
131,146,590 |
|
| Issued
during the year |
|
50,036,660 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
181,183,250 |
131,146,590 |
|
|
|
|
========== |
========== |
|
|
|
|
| The
Company offered right shares on December 27, 1997 in the ratio of one share
for each share held. Out |
|
| of
the shares issued during the year against right issue the shares worth Rs. 50
million were subscribed by |
|
| parties
other than existing share holders. |
|
|
|
|
|
|
| 4.
CAPITAL RESERVE |
|
|
|
| Statutory
/ special reserve |
|
4.1 |
13,600,000 |
13,600,000 |
|
|
|
|
|
|
========== |
========== |
|
|
|
|
| 4.1
This reserve has been created to comply with the State Bank's requirement of
reserve fund for Non- |
|
| bank
Financial Institution. |
|
|
|
|
|
|
| 5.
REVENUE RESERVES |
|
|
|
| Reserve
for contingencies |
|
|
10,000,000 |
10,000,000 |
|
| General reserve |
|
|
13,500,000 |
13,500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
23,500,000 |
23,500,000 |
|
| Transferred
to profit and loss appropriation |
|
|
| account
during the year |
|
|
|
| Reserve
for contingencies |
|
|
1,000,000 |
-- |
|
| General reserve |
|
|
13,500,000 |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
(23,500,000) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
-- |
23,500,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
1999 |
1998 |
|
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 6.
SURPLUS ON REVALUATION OF FIXED ASSETS |
|
| Revaluation
of freehold land and building have been carried out as on June 30, 1999, by
M/s. Tahir |
|
| Associates
and M/s. Hasib Associates, Surveyors and Valuation Consultants on the basis
of depreciated |
|
| replacement
values. Revaluation surplus has been credited to surplus on revaluation of
fixed assets accounts |
|
| to
comply with the requirement of section 235 of the Companies Ordinance, 1984. |
|
|
|
|
|
| 7.
LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE |
|
| Opening
balance |
|
1,283,902 |
2,802,826 |
|
| Obtained
during the year |
|
1,500,500 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
2,784,402 |
2,802,826 |
|
| Paid
during the year |
|
(1,747,020) |
(1,518,924) |
|
|
|
------------------ |
------------------ |
|
|
|
1,037,382 |
1,283,902 |
|
| Security deposit |
|
-- |
(761,596) |
|
|
|
------------------ |
------------------ |
|
|
|
1,037,382 |
522,306 |
|
| Payable
within one year shown under current liabilities |
|
(421,197) |
(522,306) |
|
|
|
------------------ |
------------------ |
|
|
|
616,185 |
-- |
|
|
|
|
========== |
========== |
|
|
|
|
| 7.1
These represent the outstanding balance against the obligations under finance
lease. The rate of |
|
| return
used as discounting factor is from 21% to 24% (1998 - 21% to 31%) per annum.
The lease |
|
| rentals
are payable in equal monthly installments. |
|
|
| 7.2
The future minimum lease payments to which the company is committed under the
lease agreements |
|
| as
at June 30, 1999 are as under: |
|
|
|
|
| Year
ending June 30, |
|
| 2000 |
|
|
|
600,120 |
|
| 2001 |
|
|
|
600,120 |
|
| 2002 |
|
|
|
100,020 |
|
|
|
|
------------------ |
|
|
|
|
1,300,260 |
|
| Less:
Finance charges allocated to future period |
|
(262,878) |
|
|
------------------ |
|
|
|
1,037,382 |
|
|
========== |
|
|
|
|
|
|
|
NOTE |
1998 |
1999 |
|
|
|
|
|
|
Rupees |
Rupees |
|
| 8.
SHORT TERM DEPOSITS |
|
|
|
| Deposits
from banks and financial institutions |
|
|
75,000,000 |
180,000,000 |
|
| Deposits
from corporate and other clients |
|
|
80,598,847 |
877,334,969 |
|
|
|
|
------------------ |
------------------ |
|
| Total |
|
8.1 |
155,598,847 |
1,057,334,969 |
|
| Federal
Government Bonds |
|
8.2 |
702,544,200 |
-- |
|
|
|
|
------------------ |
------------------ |
|
| Total deposits |
|
|
858,143,047 |
1,057,334,969 |
|
| Less:
Due after one year |
|
|
(709,707,220) |
(32,966,620) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
148,435,827 |
1,024,368,349 |
|
|
|
|
========== |
========== |
|
|
|
|
| 8.1 Pak rupee |
|
|
8.1.1 |
111,047,362 |
251,083,561 |
|
|
| Foreign
currency |
|
|
29,731,580 |
752,108,025 |
|
|
| Other deposits |
|
|
14,819,905 |
24,268,793 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
155,598,847 |
1,057,460,379 |
|
|
|
|
|
========== |
========== |
|
|
|
| 8.1.1
These include deposits with maturities ranging from 1 to 60 months (1998 - 1
to 60 months). The |
|
| provisional
rate of return ranges from Rs. 0.101 to Rs. 0.5068 per Rs. 1,000/- per day
(1998 - Rs. |
|
| 0.1815
to Rs. 0.5890 per Rs. 1,000/- per day). |
|
|
|
|
|
|
| 8.2
These are deposits held by the company as a rupees counter part of Federal
Government US dollar |
|
| bonds
carrying interest rate as specified by State Bank of Pakistan, payable on
quarterly basis. |
|
|
|
|
| 9.
BORROWINGS |
|
|
|
| From
banking companies and financial institutions 9.1 |
|
140,000,000 |
203,054,645 |
|
| Others
(Pakistan Emerging Venture Limited) - unsecured |
|
30,000,000 |
-- |
|
|
- secured |
|
5,000,000 |
-- |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
175,000,000 |
203,054,645 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
| 9.1
From banking companies and financial institutions |
|
|
| Secured (9.1.1) |
|
|
|
|
|
| Paramount
Leasing Limited |
|
|
5,000,000 |
-- |
|
| Orix
Investment Bank Pakistan Limited |
|
10,000,000 |
-- |
|
| Union
Bank Limited |
|
|
|
-- |
13,000,000 |
|
| Jahangir
Siddiqi & Company Limited |
|
|
-- |
5,000,000 |
|
| Unsecured
(9.1.2) |
|
|
|
|
| Dawood
Leasing Limited |
|
20,000,000 |
20,000,000 |
|
| English
Leasing Limited |
|
30,000,000 |
-- |
|
| Orix
Investment Bank |
|
60,000,000 |
-- |
|
| Pak
Libya Holding Company (Pvt) Limited |
|
15,000,000 |
-- |
|
| Al-Zamin
Leasing |
|
|
-- |
5,000,000 |
|
| Bank of Punjab |
|
|
-- |
50,000,000 |
|
| Pak
Industrial and Commercial Leasing |
|
|
-- |
10,000,000 |
|
| Pakistan
Industrial Leasing Corporation |
|
|
-- |
10,000,000 |
|
| National
Discounting Services Limited |
|
|
-- |
15,000,000 |
|
| Fidelity
Investment Bank |
|
|
-- |
9,054,645 |
|
| Bank
of Coylone |
|
|
-- |
15,000,000 |
|
| Security
Investment Bank |
|
|
-- |
1,100,000 |
|
| Union
Leasing Company |
|
|
-- |
40,000,000 |
|
|
|
------------------ |
------------------ |
|
|
|
|
|
140,000,000 |
203,054,645 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 9.1.1
These are secured against pledge of shares and carry markup rates ranging
between 11% to 16% |
|
| per
annum (1998 - 10% to 18% per annum). |
|
|
|
|
|
| 9.1.2
These are subject to markup rates ranging between 11% to 20% per annum (1998-
9% to 21% per |
|
| annum). |
|
|
|
|
|
|
| 10.
ACCRUED AND OTHER LIABILITIES |
|
|
| Accrued
return on deposit and borrowings |
|
30,718,469 |
31,857,744 |
|
| Accrued
expenses |
|
2,764,672 |
9,740,188 |
|
| Current
portion of obligations under finance lease |
|
421,197 |
522,306 |
|
|
|
|
| Other liabilities |
|
|
|
| Central
excise duty |
|
454,716 |
455,116 |
|
| Others |
|
|
5,930,673 |
24,853,936 |
|
|
|
------------------ |
------------------ |
|
|
|
6,385,389 |
25,309,052 |
|
|
|
------------------ |
------------------ |
|
|
|
40,289,727 |
67,429,290 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 11.
CONTINGENCIES AND COMMITMENTS |
|
|
| Guarantees
issued on behalf of customers |
|
|
254,697,764 |
309,334,879 |
|
| Income
tax liability disputed by the Company |
|
11.1 |
-- |
8,398,808 |
|
| Commitment
for repurchase of |
|
|
|
| Federal
Investment bonds |
|
|
170,000,000 |
186,000,000 |
|
|
|
|
|
| Commitment
for CNG project |
|
|
30,000,000 |
-- |
|
|
|
|
|
| 1
1.1 The Company was treated as a banking company by the Deputy Commissioner
of Income Tax raising |
|
| tax
liability due to application of banking company rate of tax. The Income Tax
Appellate Tribunal |
|
| has
decided the case in favour of the Company. |
|
|
|
| 12.
TANGIBLE FIXED ASSETS |
|
|
|
Cost at |
Addition/ |
Revaluation |
Adjustment |
Cost at |
Accumulated |
Depreciation |
Depreciation |
Accumulated |
Written down |
Dep. |
|
| Particulars |
|
July 01, |
(Deletion) |
|
June |
Depreciation |
for the |
on deletions/ |
depreciation |
value at |
Rate |
|
|
1998 |
|
30, 1999 |
at July |
year |
(Adjustment) |
at June |
June 30, |
% |
|
|
|
01, 1998 |
|
30, 1999 |
1999 |
|
|
| Owned assets |
|
| Land - freehold |
|
1,212,600 |
-- |
3,187,400 |
-- |
4,400,000 |
-- |
-- |
-- |
-- |
4,400,000 |
-- |
|
| Building
on freehold land |
19,957,424 |
49,020 |
21,509,734 |
(4,883,008) |
36,633,170 |
4,845,137 |
1,000,322 |
(4,883,008) |
962,451 |
35,670,719 |
5 |
|
| Leasehold
improvements |
12,912,488 |
192,750 |
-- |
-- |
13,105,238 |
4,254,003 |
1,893,680 |
-- |
6,147,683 |
6,957,555 |
10 |
|
| Furniture
and fixture |
8,027,339 |
175,072 |
-- |
-- |
7,838,141 |
4,013,220 |
763,846 |
(237,090) |
4,539,976 |
3,298,165 |
10-33 |
|
|
|
(364,270) |
|
|
|
| Computers,
appliances |
|
|
|
| and
office equipments |
14,067,611 |
586,602 |
-- |
-- |
14,250,139 |
9,860,234 |
1,850,017 |
(334,276) |
11,375,975 |
2,874,164 |
20 |
|
|
|
(404,074) |
|
|
|
| Vehicles |
|
4,986,351 |
376,600 |
-- |
-- |
7,739,559 |
2,262,830 |
1,347,058 |
(553,449) |
5,646,314 |
2,093,245 |
20 |
|
|
|
(1,323,213) |
|
|
|
| Transferred
from leased assets |
-- |
3,699,821 |
-- |
-- |
-- |
-- |
-- |
2,589,875 |
-- |
-- |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
61,163,813 |
5,079,865 |
24,697,134 |
(4,883,008) |
83,966,247 |
25,235,424 |
6,854,923 |
2,589,875 |
28,672,399 |
55,293,848 |
|
|
|
|
(2,091,557) |
|
(4,883,008) |
|
|
|
| Leased assets |
|
|
|
|
| Vehicles |
|
7,761,946 |
1,500,500 |
-- |
-- |
3,386,625 |
5,181,137 |
677,325 |
-- |
1,745,387 |
1,641,238 |
|
|
|
|
(2,176,000) |
|
(1,523,200) |
|
|
| Transferred
to own assets |
|
(3,699,821) |
|
(2,589,875) |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
| Rupees |
|
68,925,759 |
6,580,365 |
24,697,134 |
(4,883,008) |
87,352,872 |
30,416,561 |
7,532,248 |
(6,406,208) |
30,417,786 |
56,935,086 |
|
|
|
|
(7,967,378) |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 1998 Rupees |
|
60,315,007 |
8,610,752 |
-- |
-- |
68,925,759 |
25,520,480 |
7,619,524 |
(2,723,443) |
30,416,562 |
38,509,197 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
========== |
|
|
| 12.1
Detail of disposal of tangible fixed assets |
|
|
|
Cost |
Accumulated |
Written down |
Sale |
Mode of |
|
|
| Particulars |
|
|
depreciation |
value |
Proceed |
sale |
Purchaser |
|
|
| Furniture
and fixture |
362,240 |
235,567 |
126,673 |
126,673 |
Company policy |
Mr. Sultan M. Khan -
Ex-chairman |
|
| Furniture
and fixture |
2,030 |
1,523 |
507 |
507 |
-do- |
Mr. M. R. Mirza -
Ex-Employee |
|
| Motor vehicle |
|
799,000 |
159,000 |
640,000 |
653,000 |
-do- |
Mr. Teizoon Kissat -
Ex-Employee |
|
| Motor vehicle |
|
40,000 |
36,000 |
4,000 |
40,000 |
-do- |
Mr. Jared M. Khan -
Ex-Employee |
|
| Motor vehicle |
|
386,713 |
270,699 |
116,014 |
135,350 |
-do- |
Mr. S. Abrar H. Zaidi -
Ex-Employee |
|
| Motor vehicle |
|
923,500 |
665,950 |
257,550 |
257,550 |
-do- |
Mr. Sultan M. Khan -
Ex-Chairman |
|
| Motor vehicle |
|
615,000 |
430,500 |
184,500 |
438,436 |
Insurance claim |
EFU Insurance Company |
|
| Motor vehicle |
|
367,500 |
257,250 |
110,250 |
183,750 |
Company policy |
Mr. Shoaib Bashir -
Ex-Employee |
|
| Motor vehicle |
|
367,500 |
257,250 |
110,250 |
110,250 |
-do- |
Mr. Aamir Shamim -
Ex-Employee |
|
| Appliances
residence |
215,009 |
192,478 |
22,531 |
22,531 |
-do- |
Mr. Sultan M. Khan -
Ex-Chairman |
|
| Appliance
residence |
44,600 |
44,596 |
4 |
4 |
-do- |
Mr. M. R. Mirza -
Ex-Employee |
|
| Mobile phone |
|
47,000 |
31,399 |
15,601 |
15,926 |
-do- |
Mr. Sultan M. Khan -
Ex-Chairman |
|
| Airconditioner |
|
43,600 |
43,598 |
2 |
10,000 |
-do- |
Mr. Inamullah & Mr.
Sajjad - Employees |
|
| Fax Machine |
|
17,500 |
7,000 |
10,500 |
10,500 |
-do- |
Mr. Sultan M. Khan -
Ex-Chairman |
|
| Mobile phone |
|
20,500 |
4,100 |
16,400 |
20,500 |
Trade in |
Mr. Aamir Shamim -
Ex-Employee |
|
| Computer
appliances |
15,865 |
11,105 |
4,760 |
4,760 |
Trade in |
Switch Securities
(Private) Limited |
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
|
An associated undertaking |
|
| Rupees |
|
4,267,557 |
2,648,015 |
1,619,542 |
2,029,737 |
|
|
|
========== |
========== |
========== |
========== |
|
| 1998 Rupees |
|
3,886,095 |
2,723,442 |
1,162,653 |
1,369,874 |
|
|
========== |
========== |
========== |
========== |
|
|
|
|
|
| 12.2
Surplus on revaluation undertaken as at June 30, 1999 of land and building
has been arrived at as |
|
| under:- |
|
|
|
Land |
Building |
Total |
|
|
Rupees |
Rupees |
Rupees |
|
|
|
|
|
|
1,212,600 |
19,957,424 |
21,170,024 |
|
| Accumulated
depreciation upto June 30, 1999 |
|
-- |
(4,883,008) |
(4,883,008) |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
1,212,600 |
15,074,416 |
16,287,016 |
|
| Depreciated
replacement value at June 30, 1999 |
|
4,400,000 |
36,584,150 |
40,984,150 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
3,187,400 |
21,509,734 |
24,697,134 |
|
|
|
|
========== |
========== |
========== |
|
|
| 12.3.
Had there been no revaluation, the related figures of land and building on
freehold land at June |
|
| 30,
1999 would have been as follows:- |
|
|
|
|
|
Accumulated |
Written down |
|
|
|
Cost |
depreciation |
value |
|
|
|
Rupees |
Rupees |
Rupees |
|
|
|
|
| Land - Freehold |
|
1,212,600 |
-- |
1,212,600 |
|
| Building
on freehold land |
|
19,957,424 |
4,883,008 |
15,074,416 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
21,170,024 |
4,883,008 |
16,287,016 |
|
|
|
|
========== |
========== |
========== |
|
|
| Revaluation
of freehold land and building on freehold land is carried out by independent
valuers |
|
| M/s.
Tahir Associates and M/s. Hasib Associates, as on June 30, 1999 which created
a surplus of |
|
| Rs.
24,697,134/- .This amount is included in the assets with a corresponding
amount appearing as |
|
| surplus
on revaluation of fixed assets (Refer Note No. 6) to comply with the
requirement of section 235 |
|
| of
the Companies Ordinance, 1984. In view of the fact that revaluation was
carried out at the year end |
|
| the
depreciation on revalued asset will be charged from July 01, 2000. |
|
|
|
|
|
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
|
| 13.
INTANGIBLE ASSETS |
|
|
|
| Membership
card / room -Islamabad Stock |
|
|
| Exchange
Guarantee Limited |
|
4,500,000 |
4,500,000 |
|
|
|
|
========== |
========== |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 14.
LONG TERM INVESTMENT- At cost |
|
|
| (a)
Federal Investment Bonds |
|
|
-- |
13,570,000 |
|
| (b)
Investments in wholly owned subsidiaries |
|
14.1 |
20,015,000 |
20,015,000 |
|
| (c)
Investments in shares and certificate of listed |
|
|
|
|
| Companies
and Modarabas |
|
|
|
|
|
|
|
|
|
| Managed
Modaraba |
|
|
|
|
| First
Islamic Modaraba 2,000,000 certificate |
|
|
|
|
| of
Rs. 10/- each purchased as sponsors |
|
|
20,000,000 |
20,000,000 |
|
|
|
|
| 4,928,000
certificates of Rs. 10/- each |
|
|
| taken
up as underwriters |
|
|
49,280,000 |
49,280,000 |
|
|
|
|
------------------ |
------------------ |
|
| Aggregate
market value Rs. 70,319,200/- |
|
|
69,280,000 |
69,280,000 |
|
| (1998-
Rs. 13,856,000/-) |
|
14.2 |
|
|
|
|
| (d)
Investments in listed companies and Modarabas14.3 |
|
133,522,944 |
103,024,118 |
|
| Aggregate
market value Rs. 73,168,711/- |
|
------------------ |
------------------ |
|
| (1998
- Rs. 60,754,694/-) |
|
202,802,944 |
172,304,118 |
|
|
|
|
| (e)
Investment in Unlisted Company |
|
|
| Bright
Star (Private) Limited |
|
5,000,000 |
-- |
|
| 500,000
Ordinary shares of Rs, 10/- each |
|
|
|
| (Breakup
value Rs. 5,375,000/-) |
|
------------------ |
------------------ |
|
|
|
227,817,944 |
205,889,118 |
|
|
|
|
========== |
========== |
|
|
|
|
| 14.1.
Investments in wholly owned subsidiaries |
|
|
| Switch
Securities (Private) Limited |
|
|
|
| 1,501,500
Ordinary shares of Rs. 10/- each |
|
|
15,015,000 |
15,015,000 |
|
| (Breakup
value- Rs. 15,459,902/-) (1998 - Rs. 15,045,607/-) |
|
|
|
|
| Switch
Currencies (Private) Limited |
|
|
| 50,000
Ordinary shares of Rs. 10/- each |
|
|
5,000,000 |
5,000,000 |
|
| (Breakup
value- Rs. 3,132,765/- ) (1998- Rs. 3,848,350/-) |
|
------------------ |
------------------ |
|
|
|
|
20,015,000 |
20,015,000 |
|
|
|
|
========== |
========== |
|
|
| 14.2
The extent of holding in the Managed Modaraba is 69.3% |
|
|
| The
market value of this investment has remained below par for prolonged period
during the year and |
|
| subsequently
as well. The Management intends to merge the Modaraba with the bank for which
the |
|
| consultants
/ lawyers has been engaged. The application for merger will be moved with the
permission of |
|
| the
concerned authorities. |
|
|
| 14.3
Investments in fully paid ordinary shares and certificates of Rs. 10/- each
in listed companies and |
|
| Modarabas. |
|
|
|
|
|
June 30,
1999 |
|
|
|
No. of shares |
Rupees |
|
| Name
of Company / Modaraba |
|
|
|
|
|
|
|
| Mutual Funds |
|
|
|
| 22nd
ICP Mutual Fund |
|
194,700 |
1,947,000 |
|
| 23rd
ICP Mutual Fund |
|
168,600 |
1,686,000 |
|
| 24th
ICP Mutual Fund |
|
249,400 |
2,494,000 |
|
| ICP (S.E.M.F.) |
|
15,000 |
613,200 |
|
| K.A.S.B.
Premier Fund |
|
90,000 |
900,000 |
|
| 1st
Capital Mutual Fund |
|
100,000 |
1,000,000 |
|
|
|
|
|
|
|
| Modaraba
Companies |
|
|
|
| First
Crescent Modaraba |
|
12,311 |
215,000 |
|
| First
Allied Bank Modaraba |
|
3,333 |
-- |
|
| B.R.R.
Modaraba |
|
1,500 |
41,804 |
|
| First
Grindlays Modaraba |
|
592 |
18,000 |
|
|
|
|
|
|
| Investment
Companies / Banks |
|
|
|
| Askari
Commercial Bank Limited |
|
57,050 |
2,136,500 |
|
| Al-Faisal
Investment Bank Limited |
|
19,937 |
890,450 |
|
| Bank
Al-Habib Limited |
|
30,056 |
865,085 |
|
| Bank
of Punjab Limited |
|
379 |
-- |
|
| Citicorp
Investment Bank Limited |
|
15,500 |
1,316,900 |
|
| Crescent
Investment Bank Limited |
|
22,000 |
1,298,500 |
|
| 1st
International Investment Bank Limited |
|
12,000 |
341,600 |
|
| Prime
Commercial Bank Limited |
|
15,870 |
508,350 |
|
| Metropolitan
Bank Limited |
|
38,750 |
1,181,500 |
|
| Soneri
Bank Limited |
|
34,440 |
920,825 |
|
| Union
Bank Limited |
|
22,990 |
781,200 |
|
| First
Capital Securities Limited |
|
6,000 |
170,100 |
|
|
|
|
|
|
| Textile
Spinning |
|
|
|
| Data
Textile Mills Limited |
|
15,000 |
263,250 |
|
| Gulshan
Spinning Mills limited |
|
5,320 |
137,455 |
|
| Hajra
Textile Mills Limited |
|
10,625 |
345,737 |
|
| J.A.
Textile Mills Limited |
|
10,000 |
125,900 |
|
| Kohinoor
Spinning Mills Limited |
|
5,000 |
142,275 |
|
| Mohib
Textile Mills Limited |
|
6,835 |
265,770 |
|
| Suraj
Cotton Mills Limited |
|
2,800 |
28,826 |
|
|
|
|
|
|
| Textile
Weaving |
|
|
|
| Kohinoor
Weaving Mills Limited |
|
500 |
9,545 |
|
|
|
|
|
|
| Synthetic
and Rayon |
|
|
|
| Tristar
Polyester Limited |
|
18,166 |
368,390 |
|
| Tawakal
Polyester Limited |
|
9,500 |
213,466 |
|
| Gatron
Industries Limited |
|
13,200 |
889,320 |
|
| Dewan
Salman Fibre Limited |
|
6,500 |
655,000 |
|
|
|
------------------ |
------------------ |
|
|
|
1,213,854 |
22,770,948 |
|
|
|
|
========== |
========== |
|
|
|
|
|
June 30,
1999 |
|
|
|
No. of shares |
Rupees |
|
| Name
of Company / Modaraba |
|
|
|
| Textile
Composite |
|
|
|
| Ghazi
Fabrics Limited |
|
25,100 |
422,409 |
|
| Legler
Nafis Denim Mills Limited |
|
1,420,873 |
29,909,349 |
|
| Nishat
Mills Limited |
|
9,000 |
274,800 |
|
| Zahoor
Textile Mills Limited |
|
375 |
4,009 |
|
|
|
|
| Cement |
|
|
|
| Mustehkam
Cement Limited |
|
2,500 |
561,350 |
|
| D.G.
Khan Cement Limited |
|
16,070 |
1,512,320 |
|
| Essa
Khan Cement Limited |
|
20,203 |
732,130 |
|
| Gharibwal
Cement Limited |
|
304 |
18,895 |
|
| Pioneer
Cement Limited |
|
48,201 |
474,965 |
|
| Maple
Leaf Cement Limited |
|
230,451 |
2,781,940 |
|
| Fecto
Cement Limited |
|
20,000 |
1,148,050 |
|
|
|
|
| Fuel and Energy |
|
|
|
| K.E.S.C. |
|
15,380 |
627,720 |
|
| Sui
Northern Gas Pipelines Limited |
|
752,185 |
19,808,115 |
|
| Maple
Leaf Electric Co. Limited |
|
702,752 |
12,083,120 |
|
| Ibrahim
Energy Limited |
|
11,250 |
714,600 |
|
| Sui
Southern Gas Pipelines Limited |
|
23,805 |
780,400 |
|
| Elahi
Electric Company Limited |
|
25,000 |
550,000 |
|
| Nishat
Tek Limited |
|
8,651 |
275,750 |
|
| Kohinoor
Genertek Limited |
|
500 |
10,000 |
|
| Generteck |
|
15,000 |
394,500 |
|
|
|
|
| Chemical
and Pharmaceutical |
|
|
|
| Wah
Nobel Chemicals Limited |
|
1,200 |
94,280 |
|
| Searle
Pakistan Limited |
|
1,347 |
51,500 |
|
| Otsuka
Pakistan Limited |
|
5,000 |
164,500 |
|
| I.C.I.
Pakistan Limited |
|
5,250 |
274,000 |
|
|
|
|
| Leasing
Companies |
|
|
|
| Pak.
Industrial Leasing Corp. Limited |
|
5,000 |
282,300 |
|
| Trust
Leasing Corp. Limited |
|
11,200 |
235,020 |
|
| Union
Leasing Corporation Limited |
|
31,350 |
570,225 |
|
| National
Development Leasing Corporation |
|
8,858 |
374,950 |
|
|
|
|
| Sugar
and Allied |
|
|
|
| Crescent
Sugar Mills Limited |
|
1,517 |
1,920 |
|
|
|
|
|
| Auto and Allied |
|
|
|
| Gandhara
Nissan Limited |
|
13,000 |
425,420 |
|
| Indus
Motor Limited |
|
5,000 |
241,000 |
|
| Pak
Suzuki Limited |
|
10,000 |
502,400 |
|
|
|
|
| Glass
and Ceramic |
|
|
|
| Tariq
Glass (Nasir Saddiq) Limited |
|
14,500 |
321,110 |
|
|
|
------------------ |
------------------ |
|
|
|
3,460,822 |
76,623,047 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
June 30,
1999 |
|
|
|
|
No. of shares |
Rupees |
|
|
|
|
| Name
of Company / Modaraba |
|
|
|
| Transport
and Communication |
|
|
|
| Pakistan
Telecommunication Company Limited |
|
|
45,000 |
2,470,050 |
|
|
|
|
|
| Engineering |
|
|
|
|
| Abbas
Engineering (Hashoo Steel) Limited |
|
11,500 |
186,475 |
|
|
|
|
|
|
|
|
| Insurance |
|
|
|
|
| Adamjee
Insurance Company Limited |
|
505,000 |
31,187,324 |
|
|
|
|
|
|
|
| Miscellaneous |
|
|
|
|
| Al-Khair
Gadoon Limited |
|
|
20,000 |
285,100 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
581,500 |
34,128,949 |
|
|
|
------------------ |
------------------ |
|
| June
30, 1999 |
|
|
5,256,176 |
133,522,944 |
|
|
|
|
========== |
========== |
|
| June
30, 1998 |
|
|
4,646,014 |
103,024,118 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| 15.
LONG TERM LOANS - SECURED |
|
|
| Considered
good |
|
|
| Loans to: |
|
|
|
| Chief Executive |
|
|
4,733,660 |
4,532,510 |
|
| Directors |
|
15.1 |
-- |
86,016 |
|
| Executives |
|
|
1,679,510 |
2,788,048 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
6,413,170 |
7,406,574 |
|
| Less:
Current maturity |
|
18 |
(1,010,278) |
(1,386,500) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
5,402,892 |
6,020,074 |
|
|
|
|
========== |
========== |
|
|
| 15.1
Represent loans given for house building and purchase of vehicles and
furniture and fixture and are |
|
| repayable
within a maximum period of 66 equal monthly installments. The loans carry
markup |
|
| ranging
between Rs. 0.0548 to 0.1096 per Rs. 1,000/- per day and are secured against
registered |
|
| mortgage
of property and registration of vehicles in the joint names of employee and
company. The |
|
| maximum
aggregate amount of loans outstanding at the end of any month during the year
from chief |
|
| executive,
directors and executives were as under: |
|
|
| Chief Executive |
|
|
4,813,660 |
4,740,845 |
|
| Directors |
|
|
86,016 |
179,808 |
|
| Executives |
|
|
8,367,475 |
8,879,435 |
|
|
|
------------------ |
------------------ |
|
|
|
|
13,267,151 |
13,800,088 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
| 16.
CASH AND BANK BALANCES |
|
|
| Cash in hand |
|
|
49,079 |
-- |
|
| Cash with banks |
|
|
|
|
| In
current accounts |
|
27,549,068 |
8,438,415 |
|
| In
deposit accounts |
|
31,411,277 |
42,868,444 |
|
|
|
|
------------------ |
------------------ |
|
|
|
58,960,345 |
51,306,859 |
|
|
|
------------------ |
------------------ |
|
|
|
59,009,424 |
51,306,859 |
|
|
|
|
========== |
========== |
|
|
|
|
| 17.
SHORT TERM FINANCING - Secured |
|
|
|
| Promissory
notes discounted |
|
17.1 |
564,404,263 |
727,943,510 |
|
| Margin loans |
|
|
103,618 |
126,048 |
|
| Morabaha
arrangements |
|
|
500,000 |
500,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
565,007,881 |
728,569,558 |
|
| Less:
Provision for doubtful receivables |
|
17.2 |
(75,756,679) |
(33,229,681) |
|
|
|
|
------------------ |
------------------ |
|
| Considered
good |
|
|
489,251,202 |
695,339,877 |
|
| Less:
Due after one year |
|
|
(37,242,000) |
(80,259,679) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
452,009,202 |
615,080,198 |
|
|
|
|
========== |
========== |
|
|
| 17.1
(a) This include a forced loan of Rs. 62.727 million paid during 1994-95 to
Sunrise Textile Mills |
|
| Limited
against deferred payment guarantee issued by the Company which was
subsequently not |
|
| honoured
by the party. |
|
|
| The
Company had filed a case in the Lahore High court and obtained a decree.
After prolong |
|
| proceedings
the Company finally approached the court to allow it to purchase the property
in full and |
|
| final
settlement of the decretal amount of Rs. 317,133,608/- which was accepted by
the Court vide |
|
| order
dated December 09, 1999. The loan and accruals thereon together with other
liabilities as |
|
| mentioned
hereunder will form part of the settlement amount for this property. The
valuers has |
|
| determined
the value of property at Rs. 360.382 million. |
|
|
| The
property has liabilities towards another Bank against their financing of
letters of credit for Rs. 155 |
|
| million
approximately and towards custom authorities for demurrage approximately Rs.
70 million |
|
| respectively
on the portion of machinery lying at the port. The Company is trying to
negotiate and |
|
| reduce
the amount of these liabilities. |
|
|
|
|
|
| Markup
of Rs. 72.091 million (including Rs. 62.727 million in respect of prior
years) and guarantee |
|
| commission
of Rs. 15.867 million has been accrued against the said loan during the year
on the basis |
|
| of
value of the assets assigned by valuers and expected relief against other
liabilities included in the |
|
| settlement
amount. |
|
|
|
|
| (b)
This also include Rs. 20 million due from non performing party Saleem Sugar
Mills Limited. Provision |
|
| for
Rs. 20 million against this amount which secured by mortgage of property has
not been made |
|
| on
the basis of valuation of property obtained by the Company. Income of Rs.
21.465 million has |
|
| been
suspended. |
|
|
|
|
| 17.2
These represent advances and financial arrangements. These are secured
against hypothecation / |
|
| mortgage
of stock / property, pledge of shares and Company's own certificates of
deposit and |
|
| guarantees
from bank and directors of the respective companies. The markup rates range
from |
|
| Rs.0.3833
to Rs. 0.7123 per Rs. 1,000/- per day (1998 - Rs. 0.4383 to Rs. 0.6575 per
Rs. 1,000/- |
|
| per
day). The arrangements which are exclusively secured by certificates of
deposit of the Company |
|
| carry
markup ranging between Rs. 0.4111 to Rs. 0.5479 (1998 - Rs. 0.3698 to
Rs.0.5068 per |
|
| Rs.
1,000/- per day). |
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 18.
SHORT TERM LOANS |
|
|
|
| Loans
to employees |
|
18.1 |
645,551 |
434,258 |
|
| Current
maturity of long term loans |
|
13 |
1,010,278 |
1,386,500 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,655,829 |
1,820,758 |
|
|
|
|
========== |
========== |
|
|
|
|
| 18.1
Represent loans given for personal use and are repayable within one year.
These loans carry a |
|
| markup
rate of Rs. 0.1096 per Rs. 1,000/- per day. |
|
|
|
|
|
| 19.
SHORT TERM INVESTMENTS |
|
|
| Federal
Investment Bonds |
|
|
46,146,910 |
-- |
|
| Investments
under Repo arrangements |
|
19.1 |
5,498,667 |
54,307,762 |
|
| Term
Finance Certificates |
|
|
-- |
18,983,800 |
|
| Investments
in Government Securities |
|
|
-- |
50,000,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
51,645,577 |
123,291,562 |
|
| Less
Provision for diminution |
|
|
(3,851,875) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
47,793,702 |
123,291,562 |
|
|
|
|
========== |
========== |
|
|
| 19.1
These represent investments in shares of listed companies acquired from
investees under arrangement |
|
| to
resell them at agreed future price and date. |
|
|
| 20.
SHORT TERM PLACEMENTS |
|
|
|
|
-- |
20,000,000 |
|
|
|
|
========== |
========== |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 21.
ADVANCES, DEPOSITS, PREPAYMENTS |
|
|
| AND
OTHER RECEIVABLES |
|
|
| Advances-
unsecured, considered good |
|
|
| Forward
cover charges |
|
|
1,099,082 |
31,859,403 |
|
| Advance
for purchase of investments |
|
21.1 |
-- |
320,000 |
|
| Advance
income tax |
|
|
61,629,682 |
52,281,989 |
|
| Security
deposits |
|
|
2,384,375 |
598,925 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
65,113,139 |
86,060,317 |
|
| Prepayments |
|
|
|
|
|
| Rent |
|
|
3,489,064 |
4,094,222 |
|
| Insurance |
|
|
293,037 |
302,375 |
|
| Others |
|
|
3,655,265 |
15,125 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
7,437,366 |
4,411,732 |
|
|
|
|
|
|
| Other
receivables |
|
|
|
| Accrued
return on financing, placements |
|
|
| and investments |
|
|
21.2 |
108,396,682 |
99,817,011 |
|
| Fees
and commission |
|
21.3 |
69,826,750 |
38,447,549 |
|
| Fee
from managed Modaraba |
|
|
-- |
207,155 |
|
| Sale of shares |
|
|
|
-- |
16,460,575 |
|
| Excise
due on financing |
|
|
3,218,099 |
5,012,664 |
|
| Excise
dud on finance lease |
|
|
49,347 |
49,347 |
|
| Due
from Switch Securities (Private) Limited |
|
|
|
|
| (Wholly
owned subsidiary company) |
|
|
-- |
3,660,960 |
|
| Others |
|
|
21.4 |
10,337,255 |
12,750,874 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
191,828,133 |
176,406,135 |
|
|
|
------------------ |
------------------ |
|
|
|
|
264,378,638 |
266,878,184 |
|
|
|
|
========== |
========== |
|
|
|
|
| 21.1
Advance for purchase of investments |
|
|
| Advance
for purchase of investments |
|
|
1,493,252 |
1,493,252 |
|
| Less:
Provision for doubtful recoveries |
|
|
(1,493,252) |
(1,173,252) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
-- |
320,000 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| 21.2
Accrued return on financing, |
|
|
| placements
and investments |
|
|
| Financing
and placements |
|
21.2.1 |
103,348,907 |
78,012,793 |
|
| Investments |
|
|
|
5,047,775 |
21,804,218 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
108,396,682 |
99,817,011 |
|
|
|
|
========== |
========== |
|
|
|
|
| 21.2.1
Includes accrual of Rs. 72.091 million in respect of M/s. Sunrise Textile
Mills Limited (Refer |
|
:'~:~;;~:~'~ '~ |
|
| Note No. 17.1). |
|
~ ,~: :~ ~ |
|
|
|
|
|
| 21.3
Fees and commission |
|
|
| Fee
and commission |
|
|
21.3.1 |
94,035,758 |
39,325,557 |
|
| Less:
Provision for doubtful recoveries |
|
(24,209,008) |
(878,008) |
|
|
|
|
------------------ |
------------------ |
~:~:: :~:~.~ . . ~. |
|
|
|
|
69,826,750 |
38,447,549 |
~.:..~ ~: ~:: |
|
|
|
|
========== |
========== |
~.~. :~ ~ |
. |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 21.3.1
Includes accrual of Rs. 15.867 million in respect of |
|
| M/s.
Sunrise Textile Mills Limited (Refer Note No. 17.1 ). |
|
|
|
|
| 21.4 Others |
|
|
|
|
| Others |
|
12,750,874 |
11,208,990 |
|
| Less:
Provision for doubtful recoveries |
|
(871,735) |
-- |
|
|
|
|
------------------ |
------------------ |
|
|
|
10,337,255 |
12,750,874 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 22.
RETURN ON FINANCING AND PLACEMENTS |
|
| Financing |
|
22.1 |
170,179,995 |
108,943,405 |
|
| Placements |
|
|
6,233,094 |
30,248,067 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
176,413,089 |
139,191,472 |
|
|
|
|
========== |
========== |
|
|
|
|
| 22.1
Includes markup of Rs. 72 million in respect of M/s. Sunrise Textile Mills
Limited (Refer Note No. 17.1). |
|
|
|
|
| 23.
INCOME FROM INVESTMENTS |
|
|
|
| (Loss)/Gain
on sale of investments |
|
(8,634,761) |
8,514,358 |
|
| Income
from Repo arrangements |
|
8,194,216 |
17,339,756 |
|
| Income
from FIBs, TFCs and management accounts |
|
21,709,471 |
39,075,468 |
|
|
|
------------------ |
------------------ |
|
|
|
21,268,926 |
64,929,582 |
|
|
|
|
========== |
========== |
|
|
|
|
|
| 24.
FINANCIAL CHARGES |
|
|
| Markup
on borrowings |
|
53,463,438 |
68,277,800 |
|
| Return
on cash management accounts |
|
21,797,318 |
3,483,846 |
|
| Other items |
|
|
879,014 |
1,093,244 |
|
|
|
------------------ |
------------------ |
|
|
|
76,139,770 |
72,854,890 |
|
|
|
|
========== |
========== |
|
|
| 25.
Staff salaries and benefits includes Rs. 514,513/- (1998- 581,979/-) in
respect of staff retirement benefits. |
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| 26.
OPERATING EXPENSES |
|
|
|
| Rent,
rates and taxes |
|
26.1 |
7,275,939 |
6,867,460 |
|
| Utilities |
|
|
1,490,008 |
1,239,195 |
|
| Insurance |
|
|
909,415 |
1,011,652 |
|
| Repairs
and maintenance |
|
|
2,031,618 |
1,138,683 |
|
| Vehicles
running |
|
|
2,093,845 |
1,556,540 |
|
| Auditors'
remuneration |
|
26.2 |
524,779 |
260,652 |
|
| Legal
and professional |
|
|
1,280,633 |
2,228,493 |
|
| Donation
and charily |
|
26.3 |
270,517 |
143,242 |
|
| Travelling
and conveyance |
|
|
2,367,106 |
226,271.50 |
|
| Entertainment |
|
|
1,049,797 |
849,726 |
|
| Printing
and stationery |
|
|
774,551 |
899,106 |
|
| Advertisement |
|
|
5,081,566 |
1,523,183 |
|
| Communication |
|
|
3,115,915 |
3,114,126 |
|
| Fees
and subscription |
|
|
1,095,434 |
1,883,055 |
|
| News
papers and periodicals |
|
|
89,732 |
178,936 |
|
| Brokerage
and commission |
|
|
988,374 |
4,743,440 |
|
| Bad debts |
|
|
847,502 |
461,500 |
|
| Bank charges |
|
|
208,120 |
334,394 |
|
| Zakat |
|
|
3,750 |
1,250 |
|
| Miscellaneous |
|
26.4 |
664,948 |
1,101,193 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
32,163,549 |
31,798,541 |
|
|
|
|
========== |
========== |
|
|
|
|
| 26.1
Includes lease rentals of Rs. 583,323/- (1998 - Rs. 1,292,051/-) for vehicles
on lease. |
|
|
|
|
|
| 26.2
Auditors' remuneration |
|
|
| Statutory
audit fee |
|
|
150,000 |
120,000 |
|
| Taxation
and other services |
|
|
200,000 |
30,000 |
|
| Statutory
audit expenses |
|
|
| Prior
year (Paid to previous auditors) |
|
|
124,779 |
60,652 |
|
| Current year |
|
|
50,000 |
50,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
524,779 |
260,652 |
|
|
|
|
|
========== |
========== |
|
|
| 26.3
Recipients of donations do not include anybody in whom a director or his
spouse had any interest. |
|
|
| 26.4
This includes penalties amounting to Rs..58,093/- (1998: Rs. 7,826/-) imposed
by Slate Bank of |
|
| Pakistan
for certain violations of the provisions of Banking Companies Ordinance, and
NBFI Rules |
|
| committed
by the Company. |
|
|
|
|
|
|
NOTE |
1999 |
1998 |
|
|
|
|
Rupees |
Rupees |
|
|
|
|
| 27.
PROVISION FOR CONTINGENCIES |
|
|
| Provision
for diminution in value of investments |
|
3,851,875 |
-- |
|
| Provision
for doubtful loans |
|
|
42,526,999 |
16,693,840 |
|
| Provision
for doubtful advances |
|
|
320,000 |
1,173,252 |
|
| Provision
for doubtful fee and commission receivable |
|
23,331,000 |
878,008 |
|
| Provision
for doubtful receivables - other |
|
871,735 |
-- |
|
| Provision
for doubtful loans realized |
|
-- |
(2,067,619) |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
70,901,609 |
16,677,481 |
|
|
|
|
========== |
========== |
|
|
|
|
| 28.
OTHER INCOME |
|
|
|
| Profit
on sale of fixed assets |
|
|
410,195 |
207,221 |
|
| Profit
on transfer of room and membership card |
|
|
| of
Lahore Stock Exchange |
|
|
-- |
10,688,725 |
|
| Management
fee |
|
28.1 |
17,477,065 |
-- |
|
| Other |
|
|
590,451 |
1,375,681 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
18,477,711 |
12,271,627 |
|
|
|
|
========== |
========== |
|
|
|
| 28.1
This represents management fee @ 2% of deposit of Cash Management Accounts. |
|
|
| 29.
CASH MANAGEMENT ACCOUNTS |
|
| The
Company provides portfolio management services to its customers. Under this
scheme, the funds so |
|
| received
are invested, upon the company / customer's authority, in various investments
alternatives |
|
| depending
upon the opportunities available. The related assets and liabilities of these
management funds |
|
| are
not included in these accounts. The outstanding funds under this scheme, as
on June 30, 1999 were Rs. |
|
| 873,853,235/-
(1998 - Rs. 293,587,277/-). Out of these funds, Rs. 674,841,534/- had been
invested |
|
| in
loans and advances and Rs. 135,337,516/- had been invested in short term
investments. As the amount |
|
| received
under the above scheme are received and utilized without any liability on the
part of Bank, there |
|
| is
no requirement of making any provision against deficit, if any. From current
financial year an amount of |
|
| Rs.
17,477,065/- being 2% of deposits of Cash Management Accounts has been
charged to this account. |
|
|
| 30.
REMUNERATION OF CHIEF EXECUTIVE, |
|
| DIRECTORS
AND EXECUTIVES |
|
|
|
|
1999 |
|
1998 |
|
|
|
Chief |
|
Chief |
|
|
|
Executive |
Directors |
Executives |
Executive |
Directors |
Executives |
|
|
|
|
| Fees |
|
-- |
10,500 |
-- |
-- |
6,000 |
-- |
|
|
| Management
remuneration |
1,680,000 |
525,000 |
3,164,918 |
1,080,000 |
900,000 |
3,991,044 |
|
|
| Perquisites
house rent |
-- |
284,274 |
1,380,267 |
-- |
405,000 |
1,751,591 |
|
|
| Utilities
and others |
2,110,417 |
69,964 |
1,437,582 |
1,513,807 |
863,484 |
2,188,948 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
|
|
3,790,417 |
889,738 |
5,982,767 |
2,593,807 |
2,174,484 |
7,931,583 |
|
|
|
========== |
========== |
========== |
========== |
========== |
========== |
|
|
|
1 |
9 |
13 |
1 |
9 |
20 |
|
|
|
|
|
|
|
|
|
| 31.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES |
|
|
| Profit
risk exposure |
|
|
| Interest
rate risk and sensitivity of Company's financial liabilities and financial
assets as at June 30, 1999 |
|
| can
be evaluated from the following:-- |
|
|
|
|
|
More than |
|
Non |
|
|
|
Total |
Within one |
one year and |
More than |
interest |
|
|
Note |
Rupees |
year |
upto five years |
five years |
bearing |
|
|
|
|
| LIABILITIES |
|
|
|
| Share capital |
|
3 |
197,683,250 |
-- |
-- |
-- |
197,683,250 |
|
| Capital reserve |
|
4 |
13,600,000 |
-- |
-- |
-- |
13,600,000 |
|
| Revenue
reserve |
5 |
-- |
-- |
-- |
-- |
-- |
|
| Accumulated
loss |
|
(163,084,626) |
-- |
-- |
-- |
(163,084,626) |
|
| Revaluation
reserve |
6 |
24,697,134 |
-- |
-- |
-- |
24,697,134 |
|
| Liabilities
against assets |
|
|
|
| subject
to finance lease |
7 |
1,037,382 |
421,197 |
616,185 |
-- |
-- |
|
| Deposit
of fixed maturities |
8 |
155,598,847 |
148,435,827 |
7,163,020 |
-- |
-- |
|
| Federal
Government Deposits |
8 |
702,544,200 |
-- |
702,544,200 |
-- |
-- |
|
| Borrowings |
|
9 |
175,000,000 |
175,000,000 |
-- |
-- |
-- |
|
| Accrued
and other liabilities |
10 |
39,868,530 |
-- |
-- |
-- |
39,868,530 |
|
| Provision
for taxation |
|
9,800,000 |
-- |
-- |
-- |
9,800,000 |
|
|
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total |
|
|
1,156,744,717 |
323,857,024 |
710,323,405 |
-- |
122,564,288 |
|
|
========== |
========== |
========== |
========== |
========== |
|
|
| ASSETS |
|
| Tangible
fixed assets |
12 |
56,935,086 |
-- |
-- |
-- |
56,935,086 |
|
| Intangible
assets |
13 |
4,500,000 |
-- |
-- |
-- |
4,500,000 |
|
| Long
term investments |
14 |
227,817,944 |
-- |
-- |
-- |
227,817,944 |
|
| Short
term investments |
19 |
47,793,702 |
47,793,702 |
-- |
-- |
-- |
|
| Long
term financing |
17 |
37,242,000 |
-- |
37,242,000 |
-- |
-- |
|
| Short
term financing |
17 |
452,009,202 |
452,009,202 |
-- |
-- |
-- |
|
| Loans |
|
15 & 18 |
7,058,721 |
1,655,829 |
5,402,892 |
-- |
-- |
|
| Cash
and bank balances |
16 |
59,009,424 |
-- |
-- |
-- |
59,009,424 |
|
| Advance,
deposits, Prepayments |
|
|
| and other receivable |
21 |
264,378,638 |
-- |
-- |
-- |
264,378,638 |
|
|
------------------ |
------------------ |
------------------ |
------------------ |
------------------ |
|
| Total |
|
|
1,156,744,717 |
501,458,733 |
42,644,892 |
-- |
612,641,092 |
|
|
|
========== |
========== |
========== |
========== |
========== |
|
| Total
interest rate sensitivity gap |
|
-- |
(177,601,709) |
667,678,513 |
-- |
(490,076,804) |
|
| Accumulated
interest rate |
|
========== |
========== |
========== |
========== |
========== |
|
| sensitivity gap |
|
-- |
(177,601,709) |
490,076,804 |
490,076,804 |
-- |
|
|
========== |
========== |
========== |
========== |
========== |
|
| Unrecognized
financial assets |
|
| and
financial liabilities |
|
| Guarantees
issued |
|
254,697,764 |
254,697,764 |
-- |
-- |
-- |
|
|
|
|
|
|
| 31.1
Weighted average interest rates for financial assets and financial
liabilities are given below:- |
|
|
|
LOCAL |
FOREIGN |
CURRENCY |
|
|
CURRENCY |
US |
POUND |
|
|
|
DOLLAR |
STERLING |
|
|
| LIABILITIES |
|
| Deposit
of fixed maturities |
|
15.31 |
3.00 |
3.00 |
|
| Liabilities
against assets subject to finance lease |
21.00 |
|
| Federal
Government deposits |
|
11.64 |
|
| Borrowings |
|
14.31 |
|
| ASSETS |
|
|
| Financing |
|
19.95 |
|
| Staff loans |
|
4.00 |
|
| Investment
in government securities |
15.00 |
|
| Investment
in snares repo |
|
24.38 |
|
|
| 31.2
FAIR VALUE |
|
| The
carrying value of financial assets and financial liabilities approximates
their fair value as reflected in |
|
| the
financing instruments which are significantly different from the carrying
value are disclosed in the |
|
| respective
notes to the accounts. Fair values are determined either considering the
quoted market price on |
|
| the
balance sheet date or the price of the last transaction. |
|
|
| 31.3
CREDIT RISK |
|
| The
Company's credit risk exposure in respect of recognized financial assets is
substantially the same as the |
|
| carrying
value of the assets that are reflected in the financial statements. |
|
|
| The
Company has procedures and guidelines which initially involves credit
approvals, limits, collateral and |
|
| thereafter
continuous and thorough monitoring. The management is of the view that it is
prudent to create |
|
| provisions
for doubtful receivables when required. |
|
|
| Since
the concentration of financial assets is well diversified, the management
considers that it is not exposed |
|
| to
high credit risk. |
|
|
| 32.
TRANSACTIONS WITH ASSOCIATED COMPANIES |
|
| Other
than those already stated above, balances as at June 30, 1999 in respect of
and income and |
|
| expenditure
arising out of, transactions with associated companies are summarized below:- |
|
|
|
|
1999 |
1998 |
|
|
|
Rupees |
Rupees |
|
|
|
|
| Purchase
of currencies from Switch Currencies (Private) Limited |
|
239,540 |
7,711,962 |
|
| Operating
expenditure incurred by. the company on behalf of |
|
|
| Switch
Securities (Private) Limited |
|
3,660,960 |
3,791,942 |
|
| Reimbursement
of expenses to First Islamic Modaraba |
|
2,295,901 |
647,221 |
|
| Reimbursement
of expenses from First Islamic Modaraba |
|
1,831,230 |
-- |
|
| Loans
given by Modaraba to Company employees |
|
-- |
4,536,175 |
|
| Advances
given by Modaraba to Company suppliers |
|
-- |
3,771,092 |
|
| Purchase
of fixed assets by Modaraba on Behalf of Company |
|
-- |
4,122,700 |
|
| Repayment
of advances to Modaraba |
|
-- |
11,052,158 |
|
| Sales
of currencies to Switch Currencies (Private) Limited |
|
-- |
377,888 |
|
|
|
|
|
| 33. GENERAL |
|
| Figures
have been rounded off nearest to Rupee and corresponding figures have been
rearranged and |
|
| regrouped
wherever necessary for the purpose of comparison. |
|
|
|
M. Nadeem Anwar |
|
|
|
President & Chief Executive |
|
Director |
|
|
|
|
|
| STATEMENT
PURSUANT TO SECTION 237 OF COMPANIES ORDINANCE, 1984 |
|
|
| The
audited accounts of the company's subsidiaries together with directors'
report thereon for the year ended June |
|
| 30,
1999 are annexed to these accounts. The accumulated profit/loss which has
been carried forward in the |
|
| accounts
of respective subsidiary companies, has not been delth with in or for the
purposes of the accounts of the |
|
| Company.
Further, no provision has been made against the loss suffered by the
subsidiaries in the books of the |
|
| Company. |
|
|
| The
other information required by section 237 of the Companies Ordinance, 1984 is
given hereunder: |
|
|
|
|
Extent of |
Current |
Since |
|
| Subsidiary
companies |
|
interest |
year |
acquisition |
|
|
|
|
| Switch
Securities (Pvt) Ltd, |
|
99.9 |
402,289 |
432,886 |
|
| Switch
Currencies (Pvt) Ltd. |
|
100 |
(720,0,50) |
(1,871,500) |
|
|
|
M. Nadeem Anwar |
|
|
|
President & Chief Executive |
|
Director |
|
|
|
| PATTERN
OF SHARE-HOLDINGS AS AT JUNE 30, 1999 |
|
| AS
PER SECTION 236 OF THE COMPANIES ORDINANCE, 1984 |
|
|
| No. of |
From |
To |
Shares Held |
|
| Shareholders |
|
|
|
| 218 |
1 |
100 |
12,384 |
|
| 507 |
101 |
500 |
142,455 |
|
| 539 |
501 |
1,000 |
400,108 |
|
| 485 |
1,001 |
5,000 |
1,062,198 |
|
| 84 |
5,001 |
10,000 |
604,208 |
|
| 35 |
10,001 |
15,000 |
477,448 |
|
| 11 |
15,001 |
20,000 |
193,153 |
|
| 5 |
20,001 |
25,000 |
116,750 |
|
| 5 |
25,001 |
30,000 |
139,011 |
|
| 3 |
30,001 |
35,000 |
93,803 |
|
| 2 |
35,001 |
40,000 |
74,166 |
|
| 3 |
40,001 |
45,000 |
129,643 |
|
| 4 |
45,001 |
50,000 |
192,072 |
|
| 2 |
50,001 |
55,000 |
104,171 |
|
| 2 |
55,001 |
60,000 |
117,924 |
|
| 4 |
60,001 |
65,000 |
252,848 |
|
| 4 |
70,001 |
75,000 |
296,666 |
|
| 5 |
75,001 |
80,000 |
386,691 |
|
| 1 |
80,001 |
85,000 |
80,679 |
|
| 3 |
85,001 |
90,000 |
260,692 |
|
| 2 |
90,001 |
95,000 |
186,670 |
|
| 4 |
95,001 |
100,000 |
392,285 |
|
| 1 |
130,001 |
135,000 |
134,983 |
|
| 1 |
140,001 |
145,000 |
140,916 |
|
| 2 |
145,001 |
150,000 |
295,833 |
|
| 1 |
160,001 |
165,000 |
162,900 |
|
| 1 |
185,001 |
190,000 |
187,242 |
|
| 2 |
195,001 |
200,000 |
399,000 |
|
| 1 |
200,001 |
205,000 |
202,250 |
|
| 1 |
215,001 |
220,000 |
218,050 |
|
| 1 |
220,001 |
225,000 |
222,500 |
|
| 1 |
245,001 |
250,000 |
248,333 |
|
| 1 |
255,001 |
260,000 |
260,000 |
|
| 1 |
280,001 |
285,000 |
283,993 |
|
| 1 |
285,001 |
290,000 |
286,660 |
|
| 1 |
325,001 |
330,000 |
325,581 |
|
| 1 |
375,001 |
380,000 |
376,249 |
|
| 1 |
495,001 |
500,000 |
500,000 |
|
| 3 |
995,001 |
1,000,000 |
3,000,000 |
|
| 1 |
1,195,001 |
1,200,000 |
1,200,000 |
|
| 1 |
2,565,001 |
2,570,000 |
2,568,600 |
|
| 1 |
3,035,001 |
3,040,000 |
3,039,210 |
|
| ------------------ |
|
------------------ |
|
| 1952 |
|
19,768,325 |
|
| ========== |
|
========== |
|
|
| CATEGORIES
OF SHARE-HOLDERS AS AT JUNE 30, 1999 |
|
|
|
|
Number of |
|
|
| Categories
of shareholders |
|
Shareholders |
Shares Held |
Percentage |
|
|
| INDIVIDUALS |
|
1,912 |
12,282,374 |
62.13 |
|
| INSURANCE
COMPANIES |
|
3 |
175,893 |
0.89 |
|
| JOINT
STOCK COMPANIES |
|
14 |
63,726 |
0.32 |
|
| FINANCIAL
INSTITUTIONS |
|
15 |
1,608,826 |
8.14 |
|
| MODARABA
COMPANIES |
|
3 |
23,696 |
0.12 |
|
| FOREIGN
COMPANIES |
|
2 |
5,607,810 |
28.37 |
|
| NON-RESIDENT |
|
3 |
6,000 |
0.03 |
|
|
|
------------------ |
------------------ |
------------------ |
|
| COMPANY
TOTAL |
|
1,952 |
19,768,325 |
100.00 |
|
|
|
========== |
========== |
========== |
|
|
|
|
|
|
|
First Islamic Modaraba |
|
|
|
Annual Accounts |
|
|
|
For the year ended |
|
|
|
June 30, 1999 |
|
|
|
| CORPORATE
INFORMATION |
|
|
| Modaraba
Company |
Islamic Investment Bank
Limited |
|
|
|
|
| Chairman |
|
Bashir Ahmad |
|
| Vice Chairman |
|
Giulio David Morgan Rees
Franzinetti |
|
|
|
|
| President
& Chief Executive |
M. Nadeem Anwar |
|
|
|
|
| Directors |
|
Shahid Hafiz Kardar |
|
|
|
Andrew Geoffrey Yates |
|
|
|
Abdul Wadud Khan |
|
|
|
Arshad Wadud Khan |
|
|
|
Zafar Iqbal Qureshi |
|
|
|
Abdul Haleem Piracha |
|
|
|
Bahram Hasan |
|
|
|
| Secretary |
|
M.H.M. Burney |
|
|
|
|
| Auditors |
|
Hameed Chaudhri & Co. |
|
|
|
Chartered Accountants |
|
|
| Legal Retainers |
|
M/s. Habib-ur-Rehman
& Co. |
|
|
|
Barrister &
Advocates, Karachi |
|
|
|
|
| Banker |
|
Gulf Commercial Bank |
|
|
|
Union Band Limited |
|
|
|
National Bank of Pakistan |
|
|
|
Bolan Bank Limited |
|
|
|
Allied Bank of Pakistan
Limited |
|
|
|
|
| Principal Place |
|
Finance & Trade
Centre |
|
| of Business |
|
B Tower, 2nd Floor, |
|
|
|
Shahrah-e- Faisal, |
|
|
|
Karachi. |
|
|
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Board of Directors of Islamic Investment Bank Ltd., the Management Company of
First Islamic Modaraba, is |
|
| pleased
to present the 5th Annual Report of the Modaraba together with Audited
Accounts for the period from July |
|
| 01,
1998 to June 30, 1999. |
|
|
| Financial
Results |
|
| Summarized
results for the year under report are as under:- |
|
|
|
|
(Rs. in
"000") |
|
|
|
June 1999 |
June 1998 |
|
|
| Total
Operating Income |
|
|
15,572 |
17,460 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)/Profit
before Management Fee & taxation |
|
(7,392) |
2,278 |
|
| -Less:
Management Fee - 10% |
|
|
-- |
207 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)/Profit
for the period |
|
|
(7,392) |
2,071 |
|
| Less:
Provision for Taxation |
|
|
-- |
(955) |
|
|
| Add:
Unappropriated profit B/F |
|
|
1,067 |
174 |
|
|
|
|
------------------ |
------------------ |
|
| (Loss)/Profit
available for appropriation |
|
(6,325) |
1,290 |
|
|
|
|
|
|
|
| Appropriations |
|
| Transfer
to statutory reserve |
|
|
-- |
223 |
|
| Unappropriated
(Loss)/Profit carried forward |
|
(6,325) |
1,067 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(6,325) |
1,290 |
|
|
========== |
========== |
|
|
| The
total income of the Modaraba decreased to Rs. 15,572 Million as against Rs.
17,460 Million during the last |
|
| year.
However, after providing for bad debts as per prudential regulations of State
Bank of Pakistan and also for |
|
| diminution,
less un-appropriated profit amount of Rs. 1,067 Million brought forward from
1998, the loss amounted |
|
| to
Rs. 6,325 Million. |
|
|
| Fiscal
& Economic Policies |
|
| The
Government has been following a combination of supply side and demand
management policies to achieve |
|
| the
twin objectives of macro economic stability and growth. However, the macro
economic scenario for fiscal year |
|
| 1998-99
was dismal. Towards the end of the year under review events both on national
and international level |
|
| impacted
the overall economic performance. Though not significantly, yet the
international effects of retrogression |
|
| in
the East Asian economies did leave their impressions on Pakistan's economy. |
|
|
| Rising
budget deficits, declining exports, rising trade deficits, rising burden of
domestic and foreign debts, |
|
| privatization,
neglect of agriculture sector, inconsistency in economic policies and good
governance were some of |
|
| the
major problems which the country faced. |
|
|
| The
decision of the Government to freeze the Foreign Currency Accounts severely
jolted the confidence of the account |
|
| holders
and the general public. |
|
|
| Pakistan
is now a severely indebted country. Its public debt exceed 95% of the G.D.P.
and 600% of annual revenues. |
|
| Pakistan,
therefore, will have to live with the macro economic consequences of the
heavy debt. |
|
|
| Review
of Operations |
|
